let’s talk : PURCHASING PROPERTY SIGHT UNSEEN
I HAVE BIG NEWS. Last week was kind of crazy (for me) – I signed a contract to purchase my first flip – sight unseen.
So, as we do, let’s talk Real Estate, let’s talk PURCHASING A PROPERTY- SIGHT UNSEEN…
GIVE ME SOME BACKGROUND
Over the past 3 months I have been looking everywhere (around Philadelphia) for a property to flip. I have made SEVERAL trips down from NYC (which is not bad, just being dramatic) and have looked at 30+ properties in person, and maybe 100+ online. Whether it was that the numbers did not work, or I was talked out of the deal (which I know is my own fault), I was left empty handed every time I went down there. I had been working with real estate agents, wholesalers, and Craigslist sellers and NOTHING was working for me. Despite, looking at SO many properties, and not purchasing ANY, I thought I had at least decided exactly what area of the city I wanted to invest in – South Philadelphia .
Last Wednesday afternoon, I received a phone call from a wholesaler that said they had a deal that was about to be blasted out to their investor list. It was located in NORTH Philadelphia – where I had NOT been looking… BUT I decided to take a look at the property, numbers and some online pictures anyways.
I have seen these deals sell within just hours of being sent out to the buyer’s list, so I knew if I wanted to make a move I had to act quick.
After 30 minutes of looking at pictures, reading up on the neighborhood, looking at comps, and running the deal by my PIC (my fiancé) – I pulled the trigger.
I called the wholesaler and asked him to send me over a contract. Within 1 hour, I had signed it, and wired the deposit over to their group.
I thought quitting my job was risky and my way of “living on the edge”, but I think this may have topped that.
I had just signed us up for $135,000+ worth of debt for something that I had never seen in my life…
BEFORE YOU TELL ME I AM CRAZY, LET ME TELL YOU ABOUT THIS PROPERTY
– This place is a 5 bed, 1 bath townhome – so it is BIG.
– The property is located in North Philadelphia, sitting just above the adorable Fairmount neighborhood, and is walking distance to the Philadelphia Museum of Art (which I thought was cool & cultural).
– IT HAS GREAT CURB APPEAL… pictures to come as soon as we close in the next couple of weeks!
– It is already zoned for multi-family use, so we will be converting it into a duplex.
– It has a little backyard area!
– Flippers have already started to “prove” themselves in this neighborhood, and the comps are super attractive.
– Not exactly in the most desirable neighborhood… yet! But right on the outskirts of one!
– The house is totally trashed with clothes, furniture, books, etc. It’s a mess and needs to be cleaned out.
– There are some serious big ticket ($$$) items that we will need to take care of…
– No electricity.
– No signs of any hot water heater.
– The ENTIRE house needs to be redone.
– The fact that I purchased this home without MY own personal inspection (which honestly does not mean much), and most importantly, without a PROFESSIONAL inspection – so who knows what kind of structural issues it may have.
SO, WHAT ARE MY NEXT STEPS?
– I am currently working to make sure we have our funding all ready to go – this was a cash purchase.
– I am setting up our LLC bank account – this property is going under a brand new LLC.
– I am looking into title insurance.
– I am reaching out to general contractors via referrals and Thumbtack.com.
– I have reached out to architects – have been using Fiverr.com for this – does anyone have expereince with that??
– I am researching the idea of setting up a separate LLC to hire any contractors on this job – what are your thoughts on this? Do you hire the contractors in the name of the LLC the house sits under OR do you hire them under a different LLC name?
I CANNOT wait to keep you all posted and show you pictures and videos of this project!! We are SO excited / scared / nervous/ and pumped to share this journey with all of you! We will seriously keep this as real and detailed as we possibly can so that we can ALL learn from this together.
OH, and if any of you all have any recommendations for contractors in the Philadelphia area – PLEASE let us know!!
Feel free to comment on the blog post HERE and let us know what YOU think! Even if you think we were absolutely crazy / nuts to do this!
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ME! – this week’s post is based on my personal experience and findings